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Monday, May 6, 2013

Lawyer blogger Ted Folkman of the law firm Murphy & King had three interesting observations in his latest blog about the motion by Steven Donziger's lawyer and the Ecuadorians' lawyers to withdraw from their defense in Chevron's U.S. effort to block enforcement of the $19 billion Ecuador judgment against the oil giant for massive oil contamination.

They withdrew because they believe U.S. Judge Lewis Kaplan is conducting a "show trial" that has turned into a "Dickensian farce," and their clients can no longer afford them, given the rising cost of the litigation. For example, Kaplan recently appointed two of his friends as magistrate judges to oversee over 40 depositions in May. The judges' fees have to be split between the Ecuadorians/Donziger and Chevron. Total cost for the upcoming October trial could easily reach tens of millions of dollars.

Folkman wrote:

Kaplan is "open to fair criticism" of his willingness to allow Chevron to drive up legal costs intentionally and, in effect, make it impossible for the impoverished people of Ecuador and their lawyer to afford to pay their lawyers and for their defense.

Kaplan may not allow the lawyers to withdraw. This would further strain their resources and possibly require the Ecuadorians to "sell" even more equity in their judgment in order to raise money from litigation funders -- money that should be used to pay for cleanup of the toxic mess Chevron left in Ecuador and for efforts to provide clean water and health care facilities NOT for lawyers. Note that the only reason the Ecuadorians ever brought in litigation funders was to defend themselves in Kaplan's court.

Donziger could be, according to Folkman, "no worse off" without attorneys, given that it is obvious only to the most obtuse that Kaplan will rule against the Ecuadorians and Donziger. Perhaps, he muses, Donziger planned it that way. Folkman doesn't say it, but holding down legal fees during the show trial will save resources for when the real action will take place in an inevitable appeal to the Second Circuit Court of Appeals, which reversed Kaplan on an earlier ruling. Folkman concludes: "Do I have any reason to believe that this is so? Not really. But it would be a fitting next twist in this most twisty of cases."